9911796707
TMI Blog2012 (12) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... s been inserted by the Income Tax (Appellate Tribunal) (Amendment) Rules 2009 w.e.f. 01.05.2009. In the light of the facts, the contention of the assessee is rejected as such are not mistakes which are rectifiable under section 254(2). The contention raised in the Miscellaneous Application itself shows that the assessee wants a second order after recalling the original order. The I.T.A.T. has no power to review its earlier order. The power under section 254(2) is only to amend the order with a view to rectify any mistake apparent from record. The so-called mistakes pointed out in the Miscellaneous Application discussed above are not mistake apparent on record. Therefore, the same is not covered under section 254(2) - against assessee. - IT (SS) Appeal No. 1 (Agr.) of 2007 - - - Dated:- 31-5-2012 - Bhavnesh Saini, A.L. Gehlot, JJ. M.M. Agarwal for the Appellant. Sohail Akhtar for the Respondent. ORDER A.L. Gehlot, Accountant Member This Miscellaneous Application (M.A.) has been filed by the assessee against the order of this Tribunal dated 23.01.2009 passed in IT(SS)A No. 1/Agr/2007 for the Block Asst. Years 1989-90 to 1999-2000 (period upto 28.01.1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have observed and held as under :- "It is neither desirable nor permissible to pick out a word or a sentence from the judgement of this court, divorced from the context of the question under consideration and treat it to be the complete "law" declared by this court. The judgement must be read as a whole and the observations from the judgement have to be considered in the light of the questions which were before this court. A decision of this court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgement, divorced from the context of the questions under consideration by this court, to support their reasonings. In Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India [1971] 3 SCR 9; AIR 1971 SC 530, this court cautioned (at page 578 of AIR 1971 SC): "It is not proper to regard a word, a clause or a sentence occurring in a judgement of this Supreme Court, divorced from its context, as containing a full exposition of the law on a question when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedent for invoking the provisions of section 158BD thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of the Act. (348) ** ** ** A large number of decisions of various High Courts have been cited at the Bar. We would, at the out set, refer to a decision of the Gujarat High Court in Khandubhai Vasanji v. Deputy CIT [1999] 236 ITR 73. Therein, it was clearly held (page 85). "This provision indicates that where the Assessing Officer who is seized of the matter and has jurisdiction over the person other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, he shall proceed against such other person as per the provisions of Chapter XIV-B which would mean that on such satisfaction being reached that any undisclosed income belongs to such other person, he must proceed to serve a notice to such other person as per the provisions of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mal Courier Services and none else. 6.4 In any case, the said issue related to applicability of section 158BD, could not be said to be within the purview of Hon'ble ITAT, as the first appellate authority did not have any manmade (in the restored appeal) to look into the matter of applicability of section 158BD. The duty of the first appellate authority was confined only to find out as a matter of fact, as to whether there existed a warrant of authorization in the name of the appellant or not and to decide the appeal with reference to his findings on this issue. The point at issue is squarely covered by the principle laid down by the Hon'ble jurisdictional High Court in the case of S.P. Kochhar v. ITO reported in (1984) 145 ITR 255. 6.5 Thus, the second issue has been decided by the Hon'ble ITAT, not only in contravention of the principle laid down by the apex court in the matter of applicability of section 158BD, which was binding on all the 'subjects" under Article 141 of the Constitution of India, but also in violation of the principle laid down by the Hon'ble Jurisdictional High Court in the case of S.P. Kochhar ( supra ). Therefore, the order under reference deserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : [Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]" 7. To appreciate the issue, we would also like to go through some judicial views expressed by the Apex Court and High Courts which are as under:- 8. The Hon'ble High Court of Bombay in the case of CIT v. Ramesh Electric Trading Co. [1993] 203 ITR 497/[1994] 77 Taxman 43 held as under:- (Page nos. 500 501) "Under section 254(2) of the Income-tax Act, 1961, the Appellate Tribunal may, "with a view to rectifying any mistake apparent from the record", amend any order passed by it under sub-section (1) wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 254(2) of the Income-tax Act does not imply the power to recall or review the order. It is not disputed before us that on an application under section 254(2) of the Income-tax Act having been filed, the Tribunal set aside its own order in its entirety for passing an order afresh. This was tantamount to reviewing the order and not rectifying it. Under these circumstances, the order of the Tribunal passed under the provisions of section 254(2) of the Income-tax Act and the subsequent fresh order passed on April 23, 2004, cannot be sustained" 10. The Hon'ble High Court of Delhi in the case of CIT v. Honda Siel Power Products Ltd. [2007] 293 ITR 132/158 Taxman 56 held as under: - (Page 136 to 146) "A plain reading of the above provision indicates that in order to exercise the power vested in it under section 254(2) of the Act, the Tribunal has to ensure that the following factors are present : ( a ) The application is made within 4 years from the date of the order sought to be rectified. ( b ) There is a mistake apparent from the record which is brought to its notice by either the assessee or the Assessing Officer. As regards the procedure to be foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inherent power of reviewing its order on merits, the Tribunal has incidental or ancillary powers which can be exercised by it. But such power cannot be invoked to rehear a case on merits. The Tribunal can, after disposing of the appeal under section 254(1), (page 138) rehear the matter on merits only within the purview of section 254(2). The Supreme Court has held in Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji AIR 1970 SC 1273, that the power to review is not an inherent power. It must be conferred by law either specially or by necessary implication. It does not stand to reason that, if the power of review is not present with the Tribunal, it, nevertheless, can exercise such power indirectly when it cannot do so directly. If the contention of learned counsel for the respondent is correct, then it could mean that, even on merits, the Tribunal can recall its earlier order and then hear the case afresh and pass a different order. If this is so, it would amount to the Tribunal exercising power of review when it does not have any such power. To give an example, under the provisions of the Code of Civil Procedure, Order 47 provides the circumstances in which a judgment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1953] 23 ITR 180 , was one where the Supreme Court decided that, if an application had not been decided under the provisions of section 33(4) of the Income-tax Act, then a reference under section 66(1) of the Indian Income-tax Act, 1922, was not maintainable. The Supreme Court did not, in that case, hold whether the miscellaneous application had been filed and decided under the provisions of section 35 of the Indian Income-tax Act, 1922, or not. The reason for that was that from an order passed under section 35 of the 1922 Act, no reference application could be filed under section 66 of the 1922 Act. The position in law has now changed with the enactment of the 1961 Act where even from an order of rectification, a reference application under section 256 can be filed." (p. 366) The next important decision is Ms. Deeksha Suri v. ITAT [1998] 232 ITR 395 (Delhi). In the said case, the assessees had moved an application under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 ('Rules'), seeking admission by way of additional evidence before the Tribunal. The Tribunal, after hearing the appeal on merits, dismissed it by order dated 3-1-1997. On 5-2-1997 the assessees moved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal was right in dismissing the rectification application. The third important decision is J.N. Sahni's case ( supra ), again by a Division Bench of this Court. In that case, the Tribunal entertained the applications filed by the Revenue seeking rectification of an order on the ground that there were certain mistakes apparent from the record. The Tribunal then proceeded to recall the entire order and fixed the appeals for re-hearing. The assessee then moved this Court by way of an appeal and placing reliance upon the decisions in Deeksha Suri's case ( supra ) and K.L Bhatia's case ( supra ), urged that the Tribunal had exceeded its jurisdiction under section 254(2) of the Act and could not have possibly recalled the entire order. After referring to the case law, this Court reiterated that the power entrusted under section 254(2) could not be used to recall the order itself. Reference was made to the decision in Smt. Baljeet Jolly's case ( supra ), where it was categorically held that "amendment of an order does not mean obliteration of an order originally passed and its substitution by a new order". This Court expressly dissented from the decision of the Rajasthan High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before this Court contended that this could hardly be a ground for the recall of the entire order in terms of section 254(2) of the Act. In paras 6 and 7 this Court in ITAT's case ( supra ) held as under :- "6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record. What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly well-settled by two decisions of this Court in Ms. Deeksha Suri v. ITAT [1998] 232 ITR 395/100 Taxman 573 and Karan Co. v. ITAT [2002] 253 ITR 131/[2001] 118 Taxman 473. This Court has in both these decisions held that the foundation for the exercise of the jurisdiction lies in the rectification of a mistake apparent from the record which object is ensued by amending the order passed by the Tribunal. The said power does not, however, contemplate a rehearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a mistake apparent from the record within the meaning of section 254(2) of the Act. More importantly just because a point is debatable (which is one of the reasons given by the Tribunal in the instant case) would hardly provide a justification for recalling the order and fixing the appeal for a de novo hearing. While doing so, the Tribunal has no doubt made certain observations in regard to the levy of interest under section 158BFA being statutory in nature with no power vested in any authority or Tribunal to condone the same, but the very fact that the Tribunal has made those observations would not render valid the order of recall passed by it. The net result of the order made by the Tribunal continues to remain the same viz., the appeal has to be heard again simply because one of the issues decided by the Tribunal is debatable or the Tribunal has not noticed an earlier decision rendered by another Bench. Both these reasons were insufficient to justify the order of recall made by the Tribunal." (p. 381) Turning to the facts of the present case, we are of the considered view that it makes no difference whether the entire order is sought to be recalled or the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect only up to a stage. Once a party brings to the notice of the Tribunal that an important point or contention raised by the party has not been dealt with it would be within the jurisdiction and powers of the Tribunal to decide whether the same constitutes a mistake apparent from the record and thereafter, if necessary, reopen the appeal. Such a power is inherent in the Tribunal, as a party has suffered prejudice due to a lapse on the part of the Tribunal and not on account of any fault of such a party. An act of the Tribunal should not prejudice a party so as to force the party into unwarranted litigation." (p. 155) It was further observed in the above decision that "after the mistake is corrected, consequential order must follow, and the Tribunal has power to pass all necessary consequential orders". Mr. Syali accordingly advocates for a similar wider interpretation of the scope of the power under section 254(2) of the Act by this Court, in the peculiar facts of this case. We are unable to agree with this submission of Mr. Syali. One instance of a mistake apparent from the record is indicated in rule 24 of the Income-tax Appellate Tribunal Rules and that mistake is permis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds is sought to be recalled in its entirety. Neither is permissible under the garb of 'rectification'. 11. The Hon'ble Apex Court of In the case of CIT v. Karam Chand Thapar Bros. (P.) Ltd. [1989] 176 ITR 535/43 Taxman 45 it was held as under:- (page 540 -541) "It is equally settled that the decision of the Tribunal has not to be scrutinised sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on record has not been noticed by the Tribunal in its judgment. If the Court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse .. Keeping these principles in mind in the present case, we find that the Tribunal has taken note of all the relevant circumstances which appear on record and which were referred to by the departmental representatives before the Tribunal. It has not taken into account any material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 397 wherein it has been held that the Tribunal is entitled to do in exercise of power under section 254(2) is to rectify an apparent mistake available from the record and not to review its own decision or to rewrite a fresh judgement. Substitution of two paragraphs in the original order of the Tribunal by a fresh paragraph amounts to rewriting of its judgment and it is not permissible. 15. The Hon'ble High Court of Delhi in the case of CIT v. ITAT [2006] 155 Taxman 378 held that section 254(2) envisages amendment of the original order of the Tribunal and not a total substitution thereof. The said power does not, however, contemplate a re-hearing of the appeal for a fresh disposal. Thus, where the Tribunal had recalled its order and directed denovo re-hearing of the appeal on the ground that it had not noticed decision of another Bench of Tribunal while passing the said order and also because one of the issues decided by it was debatable, both these reasons were insufficient to justify the order of recall having regard to the language employed in section 254(4) of the Act. 16. The Hon'ble High Court of Calcutta in the case of CIT v. Ballabh Prasad Agarwalla [199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quotation of section, etc. The question whether interpretation of a provision of law is right or wrong is per se a debatable issue. This issue cannot be resolved by the official having co-ordinate jurisdiction under section 154 of the Act as it could not be termed to be apparent from the record." It was further held - "Held, that originally the Assessing Officer had applied section 32, sub-section (1), third proviso. Whether this provision had been correctly applied or not was a debatable issue. The notice was ultra vires the provision of section 154 and the order passed pursuant to the notice was not sustainable in law" 18. Hon'ble Calcutta High Court in the case of CIT v. Anamika Builders (P.) Ltd. [2001] 251 ITR 585/117 Taxman 356 held that the Tribunal should not change its view already taken in the matter. It is well settled law that the Tribunal has no power to review its order already passed on merits. The view is fortified in by the of Hon'ble Andhra Pradesh High Court in the case of CIT v. Ideal Engineers [2001] 251 ITR 743/118 Taxman 915, the decision of Hon'ble M.P. High Court in the case of Agrawal Warehousing Leasing Ltd. v. CIT [2002] 257 ITR 235 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the possible views, the case cannot be said to be covered by an error apparent on the face of the record. Rectification of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and not for disturbing finality. It is an admitted case, and it is now well-settled, that though the Tribunal has no inherent power of reviewing its order on merits, the Tribunal has incidental or ancillary powers which can be exercised by it. But the said power does not, however, contemplate a rehearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to review the order made by the Tribunal. It is equally settled that the decision of the Tribunal has not to be scrutinised sentence by sentence merely for review earlier order or to rehear and to get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties. The rule 34 of Income Tax (Appellate Tribunal) Rules 1963 also provides that the order of Bench shall be in writing and shall be signed and dated by the Members constituting the Bench. In the light of above law laid down by the Apex Court and in accordance with, Rules 34 35of Income Tax(Appellate Tribunal) Rules 1963 the so-called claim by the assessee that order has been pronounced in the open Court is not the order of I.T.A.T. under section 254(1) of the Act. When there is no order of I.T.A.T. in accordance with law under section 254(1), there is no question of amending the order under section 254(2) of the Act. We are aware that according to rule 34(4) the orders are to be pronounced in the Court. On perusal of records, we notice that there is no such pronouncement; rather the case/appeal was kept for order as per the order sheet dated 6.10.2008. It is also relevant to state that for such pronouncement in the open Court, the rules (4) (5) of rule 34 of has been inserted by the Income Tax (Appellate Tribunal) (Amendment) Rules 2009 w.e.f. 01.05.2009. In the light of the facts, the contention of the assessee is rejected as such are not mistakes which are rectifiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
